UK Independent: Toyota’s problems being pinned on foreign parts.


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Hi Blog.  Oh how the mighty have fallen.  Toyota, once the #1 automaker worldwide (well, for a spell) after years of building on a sterling reputation created over decades for quality and service, has finally fallen to earth.  I don’t think Shadenfreude is the natural order of things when titans stumble, but what I’ve always been miffed at is how little Toyota officially acknowledges that the secret to their success is imported NJ workers helping them cut costs through low wages.  (I could never find any official stats on how many NJ are part of the Toyota system within Japan.)  I was wondering if someone would be blaming the foreigners for sloppy parts.  Well, it turns out, they kinda are.  Read on.  Arudou Debito in Sapporo


In Toyota City, recalls are blamed on foreign components
By David McNeill
The Independent (UK) Wednesday, 3 February 2010, Courtesy of TO

Toyota City, about 200 miles east of Tokyo, once appeared on the map – if it appeared at all – as Koromo. But in 1959 town leaders renamed it after the up-and-coming local car producer, and twinned their modest town with the then global centre of auto production, Detroit.

The move must have seemed comically ambitious at the time, but half a century and over 170 million vehicles later, nobody is laughing at the world’s biggest automobile manufacturer. Toyota City is today far larger and incomparably richer; like Toyota’s cars it is a neat, efficient, slightly featureless place in contrast to the once all-conquering Detroit, which has become a byword for urban decline.

But success has come at a cost, as the firm’s problems this week show. Toyota has long been known both for the ruthless efficiency of its production line, and the matchless quality of the cars that emerged at the other end. But now the car-making behemoth has been humbled by a series of huge foreign recalls, which a shaken executive vice-president, Shinichi Sasaki admitted may cost up to $2bn (£1.25bn) in lost output and sales. The latest recall, to fix a fault that could jam accelerator pedals, involves 4.2 million cars worldwide, including roughly 180,000 in Britain.

That comes on top of another five million vehicles sent back to workshops for repair in the US, after a separate accelerator problem reportedly led to several deaths and at least a dozen class-action lawsuits in North America. Toyota was also forced to stop stateside sales and production of eight models last week, all of which will further tarnish its reputation and deal a huge blow to this year’s balance sheet, admits Sasaki. “The sales forecast is something that we’re extremely worried about,” he said this week.

Today, claims that only Toyotas made outside Japan using foreign-made parts were affected by the crisis was dealt a blow when it emerged that there have been more than 100 complaints, in Japan as well as the US, about the brakes on its new hybrid Prius model. And yet, as industry analysts have noted, the company has yet to make a formal apology for these shortcomings, let alone unveil a convincing programme for addressing them.

Experts are pondering how a company that made better, more reliable cars than almost anyone else could have ended up in such a mess. At home in Japan, which has been mostly unaffected by the recalls, the media has already named the guilty party – foreign parts makers. Toyota’s enormous global expansion has forced it to rely on local manufacturers, resulting in a drop in quality.

The faulty accelerator pedal, for example, was made by a North American company – one reason why Toyota is reportedly switching back to its decades-old domestic supplier Denso Corp. That is just one symptom of a wider problem familiar to many multinationals: how to protect quality at overseas factories, particularly when you are a company that employs 300,000 people around the world, selling in 150 countries. “Toyota set up so many plants, turning into an international company,” Keinosuke Ono, professor of business at Chubu University in Kasugai, Japan, told AP this week. “It was inevitable that rank-and-file quality is becoming endangered.”

Over two decades ago, the company began the foreign transplant of what became known as the “Toyota Way”, a system of lean production aimed at eliminating waste, producing zero defects and continually improving line performance (“kaizen”) that has transformed car-making worldwide. Some commentators also credit Toyota with a more profound innovation: shifting responsibility for production from managers back to the shop floor.

Toyota workers are not penalised for spotting problems and stopping a line, they are praised, points out Yozo Hasegawa, author of Clean Car Wars: How Honda and Toyota are Winning the Battle of the Eco-Friendly Motors. In fact, Toyota factories employ teams whose sole job is to find problems and save time and money. American factories were hampered by stalling production lines, but Toyota improvised, says Hasegawa. “When a problem arose, it would undergo repeated questioning until its roots could be traced, and a kaizen or improvement measure put in place to prevent a repeat.”

Experts say grafting that system on to overseas factories has mostly worked, but replicating Toyota’s network of trusted parts supplies, built over decades in Japan, has been more difficult. Figuring out how to fix that problem will keep the company’s top executives busy in the months to come. Meanwhile, they are praying that their mounting troubles don’t persuade buyers to switch brands. One US consumer group blames the accelerator pedal problem on at least 18 deaths in the last decade.

Only time will tell if the recalls are but potholes on Toyota’s road to world domination or signs of a deeper structural malaise, but don’t feel sorry for Toyota City yet. Although analysts expect Toyota’s market share in Europe and the US to drop to its lowest level since 2006, this is a company with deep pockets. Before its problems began last year, the car-maker had a war chest of over €19bn, helping it earn the nickname “Toyota Bank”. Toyota didn’t end General Motors’ 76-year reign as the world’s sixth-largest auto-maker by being bad at what it does. A comeback seems inevitable.

20 comments on “UK Independent: Toyota’s problems being pinned on foreign parts.

  • Well, of course. Why admit your own mistakes and lose the face of one of Japan’s biggest auto-makers when you can just as easily blame it on the foreigners? /sarcasm

  • I recently sold a completely assembled in Japan (with Japanese parts) 1987 4Runner (US version of the Hilux surf) for nearly $3000 US. This vehicle showed every bit of the well over 200,000 miles on it and got the same ~ 20 mpg that it did when it rolled off the show room floor. Of course, I have invested a lot of blood and sweat (with occasional tears) in maintaining it, but that quality just doesn’t come from Toyota any more in North America, and hasn’t for a number of years now.

    As a gear head who has been weekend-wrenching on Toyota trucks for about 15 years, I (and other fans of old Toyota trucks) tend to agree that the quality of the Denso parts used in the 1980s toyotas produced for North America was better than that of the North American parts found in the last decade or so worth of US Toyotas. In fact, this has been a point of discussion within the North American Toyota community for a number of years now. When replacing any component on an older Toyota, it is pretty much common knowledge that Denso parts are the way to go, if they are available.

    But having said that, what it comes down to is Toyota made the decisions to ramp up production and use these parts suppliers, and Toyota is fully responsible these decisions.

  • I don’t doubt for a second that if Ford or some similar automaker had a high profile auto accident in Japan that the reaction would be way over the top. You’d never see the end of it. But that does seem to be at least in part what is happening to Toyota in America. The reaction in my opinion has been overdone, and at least some of the blame lies with the US government. I definitely think the US government has been strategically heavy handed in dealing with Toyota. You can check out my blog to see the details of my argument.

    As far as foreign parts, I don’t watch TV. Is the media in Japan making a big deal over that? I mean it’s a fact that Toyota failed to control it’s suppliers in America, and the quality was diminished. That is, the same type of control Toyota was able to get in Japan from its suppliers, it failed to acquire in America. But the parts were foreign, that’s a fact. But is the media in Japan playing this angle up? Or is it just reporting it? To my knowledge, Toyota has not publicly blamed to suppliers, have they?

  • “200 miles east of Tokyo”? Are my map reading skills bad or is Toyota City located in the ocean off the coast of Chiba acording to Mr. McNeill?

  • Tomoaki Ogura on Tokudane (Fuji TV breakfast show) last week did a specific spiel on “this is a problem with foreign made components but don’t worry everyone, the Toyota-made models made in Japan using Japanese components are all fine.”

    He didn’t, as I remember add “made by superior Japanese workers who would never do such a thing as be capable of such shoddy workmanship because of a 1,000 years of tradition and spirit and devotion to monzukuri that foreigners are totally incapable of understanding,” but I felt uncomfortable with his take- it seemed that there were a lot of potentially unflattering assumptions in the commentator’s mind and why say, “well we’re alright!”

    Not quite scapegoating? I am not sure…but his take seemed to smack of ideas like: “blame the foreigners” / “it’s not Toyota’s fault as the cars are not ‘genuine’ Toyotas (because they were made by foreigners using inferior foreign made components)”/ “it’s a problem with gaijin stuff, don’t worry our real Toyotas over here are fine” etc.

    Maybe I was being oversensitive, but I thought a more decent human reaction would have been to care about the people who have been killed and bereaved by the faulty products and putting pressure on the responsible company (Toyota) to fix the problems and allay peoples’ fears.

    I have my own issues with Ogura because he seems to be a self-appointed expert on just about every issue. Plane crash? He’s an aviation expert already. No matter what the subject, he’s very confident he’s got something relevant to say. He’s got an opinion on just about everything…but maybe I am being unfair because it’s his job to spout off anyway.

    But as the story unravels, the other thing is that the supposedly superior genuine “Japanese” Toyotas have now been revealed to be dodgy as well.

    Holding Toyota accountable for the deaths and this mess is not Japan bashing, although I hope some sort of negative blame game does not develop.

    — It already has.

  • How are they going to explain the domestic recall of 170,000 vehicles or so.

    I never understood this idea of blaming the other country/company. When those first toys with lead paint that were manufactured in China came to light in the US it was rarely mentioned that they were made for a Japanese company (Sony subsidiary). If you contract out work it is still your responsibility to make sure it is up to standards.

  • so the times my Estima had uncontrolled acceleration. Was do to a foreign made part(organic fertilizer from a male bovine)!! No , it was a Japanese made floor mat ‘approved’ for use in the car.

  • Are all the pedals from the North American supplier?

    What about this talk that the real problem is in the electronic controls attached to the accelerator? I recall reading that some investigators think the difficulty surfaces when the car is in the range of 38 to 42 mph. (Sorry about the use of the word “recall” there.)

  • Newsweek Monday, February 08, 2010 9:01 AM
    Japan Doesn’t Get it
    Katie Baker, Courtesy of DY

    One of the most striking turns in the fall of Toyota is how the recall scandal is playing with much of the Japanese public: as a bewildering American frenzy. Yes, they are concerned about the recall, but many assume Americans must have some malign reason for kicking up a fuss, when in fact recalls happen all the time. Some read the recommendation from U.S. Transportation Secretary Ray LaHood to Toyota drivers–“stop driving them”–as proof of a Japan-bashing Washington conspiracy. They are quick to point out that the faulty brake pedals were actually made in Indiana, not Japan. And until very recently, at least, they seemed convinced that the frenzy would fade away without lasting damage to Japan. Look at BMW: its 2008 recall of 200,000 cars for possible airbag failure left no marks on Germany’s engineering reputation.

    Note to Japan: you don’t get it. Recalls for minor technical problems are common, but recalls of millions of vehicles for problems that can produce nightmarish, fatal crashes are not. Toyota’s recall of 6.6 million cars is the sixth largest in U.S. history so far, and one of the scariest. Most automakers have learned to handle these PR disasters forthrightly, but Toyota CEO Akio Toyoda performed a duck-and-denial routine not seen since Ford tried to evade responsibility for exploding Pintos in the 1970s before he belatedly apologized last week. Americans have also long since given up on Japan bashing, have lionized Toyota as the ultimate in manufacturing quality, and have welcomed Japanese plants, even in the Deep South. Toyota would never have conceded, before the recall, that its vaunted quality controls did not cover its U.S. operations, so it’s a bit disingenuous to blame “American made” parts now.

    This is a global company. It needs to take global responsibility. The investigation has targeted not only those Indiana-built accelerator pedals, but floor mats and computer systems, too. The U.S. National Highway Traffic Safety Administration is still investigating. And now Japanese officials are beginning to investigate, and sentiment in Japan seems to be turning, perhaps a bit too late. Gene Grabowski of Levick Strategic Communications, which advises firms facing recalls, calls this “the worst-handled auto recall in history,” and that’s saying something. The exploding Pinto became a symbol of the U.S. quality problems that allowed Toyota to flourish in America, and the runaway Prius may mark another turning point, this one less auspicious for Japan.

  • Tony In Saitama says:

    Am I the only one who sees similarities to the opening chapters of Tom Clancy’s “Debt of Honor”?

    — Elaborate?

  • Tony In Saitama says:

    By the way, (The Mr. James thread seems to have disappeared off the radar,) but for the last few days the TV has been showing Mercedes Benz ads with a “Mr. Naruhodo”, who speaks fluent German, but for some reason switches to what seems to me to be a thick Australian accent to say “Naruhodo”. Check it out when you get back. (Will try to find a link.)
    (Enjoy your holiday first. )

    — No no, I’ve seen it for a couple of weeks now. Japan Probe has already gotten on it. Funny how they call this one “annoying” but but thought I was being oversensitive to “Mr James”. Couldn’t be because they were knee-jerk reacting contrarian to before, could it?

  • Katie Baker at Newsweek states: “Recalls for minor technical problems are common, but recalls of millions of vehicles for problems that can produce nightmarish, fatal crashes are not.”

    Katie Baker is making the claim that the recall is related to one ore more very specific accident. There is no evidence on her part for this claim (see note). Yet this is the entire argument her entire outrage is spun from. That is three paragraphs of outrage spun upon an unsubstantiated claim. Also note that she continuously talks about “Japan” as if it’s some monolithic entity. Indeed, there has been a little hysteria in Japan, where suddenly many people are finding problems with their Prius cars that simply weren’t there before. So not only do *some* Japanese get it, they’re actually down right scared. Why does Katie Baker have to view this as an America versus Japan thing. (Those *Japanese* just don’t get it, do they? Give me a break.)

    Note: in the most high profile accident in California, the car had floor mats in the driver’s seat that were for another car, and they were not even properly secured. This is the most likely reason for the accident. I’m not clear on who is responsible for the floor mats. (Did the individual do this, the car dealer?) But this accident is not related to the accelerator pedal recall. I’m pretty sure the floor mats were not approved for use in that car.

    Finally, the reason the numbers are so mind boggling is because of Toyota’s efficiency. They’ve managed to achieve incredible economies of scale by using the same parts in as many models as possible. This means that if there is a recall it affects a vast number of cars. I’m sure Toyota will have to rethink this strategy in the future.

    Obviously, Toyota has failed the public relations war. I mean, it’s not even clear why they are doing the recall. I’m thinking the US department of transportation put incredible pressure on them, an at the same time there was a media storm brewing that’s now gotten totally beyond their control. So they did a recall to improve the quality of the accelerator panel. I honestly think even Toyota isn’t all clear if they are really responsible for the accidents, which why there has been so much confusion.

    Think about it like this, you can test a software program as much as you want, but there are always bugs out there once it gets released and people start doing who knows what with it. These accelerator pedals are being used in millions of cars. There’s now a *possibility* that there is someway one can use the car such that the accelerator gets stuck. And this problem existed in how many cases out of how many millions? Less than 20? First, you have to ascertain if it really wasn’t related to the driver, then you have to figure how you can alter the pedal so it won’t happen again (even if the chances are extraordinarily slim that it will) … I just don’t think Toyota has been so unreasonable. The problem is they failed to gauge the impact that both a hostile Department of Transportation and the media, looking for a good story, could have on them.

    Again though, I would expect even *worse* if a company like Ford had a similar problem in Japan. What goes around comes around, I guess.

    — Yes, but generally speaking the “bugs in a software program” are not going to result in fatalities (and there are lots of easier ways of patching them than a total recall). I don’t quite see the comparison there.

  • Watching the news, I have heard about how the faulty parts came from factories overseas. However, I believe there has been some brief mentioning of the fact that this whole recall is attributed to faults in the design (as mentioned in this article by the BBC: ). Therefore, the fingers should not be pointing at the overseas operations.

    Toyota in new doubts over fault remedies
    Tuesday, 9 February 2010
    A US Congressional committee has cast doubts on Toyota’s plans to fix its two acceleration problems.
    In a memo to lawmakers it said there was growing evidence neither Toyota nor federal safety officials had identified all the faults.
    The memo cited “substantial evidence” of redesigned floormats failing to stop the pedals sticking under the mats.
    Earlier, Toyota recalled 436,000 hybrid vehicles worldwide, including its latest Prius, to fix brake problems.
    The total includes more than 200,000 Prius cars sold in Japan and 8,500 cars in the UK.
    The memo from the US House of Representatives Oversight and Government Reform Committee also raised questions about the National Highway Traffic Safety Administration (NHTSA).
    The committee had been due on Wednesday to publicly grill Toyota’s management, as well as federal regulators, but bad weather means the hearing will now take place later this month.
    “There appears to be a growing body of evidence that neither Toyota nor NHTSA have identified all the causes of sudden unintended acceleration in Toyota vehicles,” said the memo, which was dated 5 February, but released on Tuesday.
    “Moreover, there is substantial evidence that remedies such as redesigned floor mats have failed to solve the problem.”
    The saga began in the US with reports that accelerator pedals were getting caught under the floormats.
    The Japanese car giant began taking back vehicles potentially affected by that problem in October last year and Toyota redesigned the mats.
    The floormat issue affected a number of vehicles in the US, but not the UK.
    Later, separate acceleration problems were found to be caused by the pedal sticking.
    This is being fixed by adding a small piece of metal – called a “shim” – in a procedure that Toyota starts at dealerships in the UK on Wednesday.
    Company president Akio Toyoda made the latest recall announcement at a news conference in Tokyo on Tuesday.
    Afterwards, he told reporters he might go to the US next week to explain details about the recall.
    Credit rating agency Moody’s said it had put Toyota’s credit rating on review for a possible downgrade, following the latest recall.
    Slow reaction
    Toyota’s president has come under criticism in Japan itself from the country’s Transport Minister Seiji Maehara for not reacting quickly enough to recall faulty vehicles.
    “I wish you had taken measures earlier rather than simply saying it was not a major technical problem,” Mr Maehara told Mr Toyoda in a meeting.
    There have been complaints in Japan and the US that the brakes momentarily fail when driven on rough or slippery road surfaces.
    US federal regulators received 124 reports from drivers about it, including four of crashes.
    There have been no reports of any such accidents in the UK.
    Before it announced the Prius recall in Japan, Toyota estimated its losses would reach $2bn (£1.23bn) in costs and lost sales.
    The Prius recall is expected to send this figure even higher.

    September 2007, US: 55,000 Camry and Lexus cars in floormat recall
    October 2009, US: 3.8m Toyota and Lexus vehicles recalled due to floormat problem
    November 2009, US: floormat recall increased to 4.2m vehicles
    January 2010, US: 2.3m Toyota vehicles recalled due to accelerator pedal problems (of those, 2.1m already involved in floormat recall)
    January 2010, US: 1.1m Toyotas in floormat recall
    February 2010, Europe: 1.8m Toyota’s in pedal recall
    February 2010, Japan, US: 200 reports of brake faults in new Prius. Cars recalled
    February 2010, worldwide: 436,000 hybrid vehicles in brake recall. Also, 7,300 Camry vehicles recalled in the US over potential brake tube problems

  • Debito, you said: “Yes, but generally speaking the “bugs in a software program” are not going to result in fatalities (and there are lots of easier ways of patching them than a total recall). I don’t quite see the comparison there.”

    There’s a lot here that has to be researched, and unfortunately, I haven’t had time to do as much of this as I’d like. My point is that in an obvious sense, you can’t make any car completely safe. There’s always going to be some margin of unexpected error out there. And I don’t think anyone is making the claim that Toyota should have actually *anticipated* this error, right?

    So then the question falls back on what exactly is the error, how soon should the company detected it, and what should the reaction have been. Looking around at some of the automotive blogs, I found that several bloggers noted Toyota has a reputation for voluntary recalls while American automakers have often been forced into mandatory recalls. This is noteworthy because the current recall is voluntary, not government mandated. This is certainly something I’d like to look into to see if it’s true or not, but no information is readily available *either way* in mainstream media articles about this incident. There’s also a lot of number crunching here I’d like to see, such as when recalls were performed in the past, how many complaints were there per vehicle and so on. I don’t find much of any of this in mainstream news articles. Instead, I find lots of comments about *Japanese* this or that, or the insular Toyota culture by people who clearly don’t know much about any of this. I find this as annoying as I find the same thing in Japan when issues involving foreigners or foreign things are involved. To me this is just the flip side of the same phenomena.

    The Asahi newspaper and the Yomiuri both published editorials saying Toyota needs to get its act together. (Basically joining the media frenzy, I guess) — but yet the newsweek blogger notes, “Note to Japan: you don’t get it.” She didn’t have time to check and see that a couple major dailys were criticizing Toyota, themselves? Nor does the blogger note that the U.S. National Highway Traffic Safety Administration has investigated this exact problem more than once in the past due to customer complaints and came away finding nothing wrong. They let it pass. Why the sudden change of heart? They went in a short time from, “it seems okay to us” to sending a man to Nagoya to issue Toyota a warning. What happened? I mean, the US government is in charge of GM now, is that even fair that the same body should be in charge of safety issues? What’s really going on here — did the Bush administration go soft on Toyota? Is the Obama administration pro-union and therefore anti-Toyota? … what are the hard numbers here, let’s see some graphs. What’s going on? Don’t worry, it’s just those irascible Japanese acting up again. Thank you mass media.

    If I have time I really hope to blog on this again at my own blog, but I’m not certain if I’ll get to it or not.

  • Every winter we get ‘unintended acceleration’ hysteria. One cause is that engines rev higher in colder temperature. In older cars and more spartan models, drivers who learned to drive on a clutch car fail to realize they need to put their right foot on the brake when they put the car into gear. Another cause is people with snow boots hitting both the accelerator and the brake at the same time. The floor mat issue might be something similar. A tangle of floor mat and braking action hitting the accelerator.

    I find the current theory about software or microprocessor issues interesting, but why can’t anyone reproduce such an effect under controlled conditions in the field or in a laboratory? Surely if the model is vulnerable, some sort of interference could be induced and acceleration demonstrated.

    Whether or not Toyota used faulty parts made in Japan or US or Canada, ultimately they are responsible for the safety of their cars. As they are finding out.

    On the other hand, I’m sure that in many of these cases the biggest safety factor is the driver and traffic conditions. Remember the Firestone/Bridgestone tire scandal? Ford blamed Firestone. Firestone blamed Ford. But in many cases it was simply American drivers failing to perform basic maintenance on their tires. Driving overloaded SUVs and trucks on underinflated tires (after offroad driving) at very high speeds on limited access roads is a recipe’ for disaster.

  • It is true that most cars are made from parts supplied externally. I read that BMW only designs the electronics and ‘driver interface’, all the core parts are made by external suppliers. But they should be responsible for Quality Control of course, so it is still 100% Toyotas fault.

  • Brake overide, announced this morning

    Now Toyota are going to introduce more technology, which can fail, to solve this problem.

    Why not ensure the design is foolproof initially and step up the quality control?

    — Please send link to source.

  • Just continuing to follow this story in amazement at the media frenzy, even in Japan.

    I note that wikipedia has an entry on this:–10_Toyota_vehicle_recalls

    It’s pretty good. They cite three major automotive magazines and Consumer Reports as saying, the media coverage is disproportionate to the problem.

    Obviously, we want cars to be made as safe as possible. But let’s face it, at some point, each of these companies has a bean counter who is going through the statistics trying to determine if there’s a problem and how serious is it. They all negotiate with the government over stuff like this, and all negotiations have a political element. It may be Toyota was not quite on the ball with this one and thought they had more slack than they realized. But were they so much more inept than any of the other car companies? For now, I fail to be convinced by this and am rather appalled by at least some journalist who look to *justify* the problem with cultural explanations prior to even investigating if the problem was as serious as is claimed.

    If I might report a little bit of hearsay here, I did speak directly with one Toyota engineer who has a good grasp of the technical issue involved … he suggested to me a recall was not even necessary based on the statistics, but that Toyota had no choice given the public relations battle they were now facing. Is that true? Obviously, I don’t know. Let’s see how this all plays out.


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